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Derivative Financial Instruments | 3 Months Ended
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Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | DERIVATIVE FINANCIAL INSTRUMENTS At March 31, 2024, the company’s consolidated balance sheet reflected unrealized losses of $3.9 million, net of tax, in accumulated other comprehensive loss. The company expects these items will be reclassified as operating income (loss) over the next 12 months as a result of hedged transactions that are forecasted to occur. The amount realized in operating income (loss) will differ as commodity prices change. Fair Values of Derivative Instruments The fair values of the company’s derivative financial instruments and the line items on the consolidated balance sheets where they are reported are as follows (in thousands):
| Asset Derivatives' Fair Value |  | Liability Derivatives' Fair Value |
| March 31, 2024 |  | December 31, 2023 |  | March 31, 2024 |  | December 31, 2023 |
Derivative financial instruments - forwards | $ | 6,955 |  | (1) | $ | 13,311 |  | (2) | $ | 6,642 |  | (3) | $ | 10,577 |  |
Other assets | 8 |  |  | — |  |  | — |  |  | — |  |
Other liabilities | — |  |  | — |  |  | 5 |  |  | 2 |  |
Total | $ | 6,963 |  |  | $ | 13,311 |  |  | $ | 6,647 |  |  | $ | 10,579 |  |
(1)At March 31, 2024, derivative financial instruments, as reflected on the balance sheet, includes net unrealized gains on exchange-traded futures and options contracts of $0.9 million, which include $0.9 million of net unrealized losses on derivative financial instruments designated as fair value hedging instruments, and the balance representing economic hedges. (2)At December 31, 2023, derivative financial instruments, as reflected on the balance sheet, includes net unrealized gains on exchange-traded futures and options contracts of $6.5 million, which include $0.7 million of net unrealized gains on derivative financial instruments designated as cash flow hedging instruments, $0.7 million of unrealized gains on derivative financial instruments designated as fair value hedging instruments, and the balance representing economic hedges. (3)At March 31, 2024, derivative financial instruments, as reflected on the balance sheet, includes net unrealized losses on exchange-traded futures and options contracts of $45 thousand, which included $1.8 million of net unrealized losses on derivative financial instruments designated as cash flow hedging instruments, and the balance representing economic hedges. Refer to Note 4 - Fair Value Disclosures, which contains fair value information related to derivative financial instruments. Effect of Derivative Instruments on Consolidated Balance Sheets, Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income The gains or losses recognized in income and other comprehensive income related to the company’s derivative financial instruments and the line items on the consolidated financial statements where they are reported are as follows (in thousands):
|  | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income |  | Three Months Ended March 31,
| 2024 |  | 2023
Revenues |  | $ | 3,736 |  |  | $ | — |
Cost of goods sold |  | (10,723) |  |  | (2,236) |
Net loss recognized in loss before income taxes |  | $ | (6,987) |  |  | $ | (2,236) |
|  | Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives
Gain (Loss) Recognized in Other Comprehensive Income on Derivatives |  | Three Months Ended March 31,
| 2024 |  | 2023
Commodity contracts |  | $ | (7,959) |  |  | $ | (16,811) |
A portion of the company’s derivative instruments are considered economic hedges and as such are not designated as hedging instruments. The company uses exchange-traded futures and options contracts to manage its net position of product inventories and forward cash purchase and sales contracts to reduce price risk caused by market fluctuations. Derivatives, including exchange-traded contracts and forward commodity purchase or sale contracts, and inventories of certain agricultural products, which include amounts acquired under deferred pricing contracts, are stated at fair value. Fair value estimates are based on exchange-quoted prices, adjusted as appropriate for regional location basis value, which represent differences in local markets including transportation as well as quality or grade differences.
|  |  |  | Amount of Gain (Loss) Recognized in Income on Derivatives
Derivatives Not Designated as Hedging Instruments |  | Location of Gain (Loss) Recognized in Income on Derivatives |  | Three Months Ended March 31,
|  | 2024 |  | 2023
Exchange-traded futures and options |  | Revenues |  | $ | (1,073) |  | $ | (7,876) |
Forwards |  | Revenues |  | (2,729) |  |  | 659 |
Exchange-traded futures and options |  | Cost of goods sold |  | 3,037 |  |  | 8,366 |
Forwards |  | Cost of goods sold |  | 2,868 |  |  | 426 |
Net gain recognized in loss before income taxes |  | $ | 2,103 |  | $ | 1,575
The following amounts were recorded on the consolidated balance sheets related to cumulative basis adjustments for the fair value hedged items (in thousands):
|  | March 31, 2024 |  | December 31, 2023
Line Item in the Consolidated Balance Sheet in Which the Hedged Item is Included |  | Carrying Amount of the Hedged Assets |  | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liabilities |  | Carrying Amount of the Hedged Assets |  | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liabilities
Inventories |  | $ | 25,186 |  |  | $ | (3,389) |  |  | $ | 45,898 |  |  | $ | (1,104) |
Effect of Cash Flow and Fair Value Hedge Accounting on the Statements of Operations:
| Location and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging Relationships for the Three Months Ended March 31,
| 2024 |  | 2023
| Revenue |  | Cost of Goods Sold |  | Revenue |  | Cost of Goods Sold
Gain (loss) on cash flow hedging relationships |  |  |  |  |  |  |
Commodity contracts |  |  |  |  |  |  |
Amount of gain (loss) on exchange-traded futures reclassified from accumulated other comprehensive income into income | $ | 3,736 |  |  | $ | (10,723) |  |  | $ | — |  |  | $ | (2,236) |
Gain (loss) on fair value hedging relationships |  |  |  |  |  |  |
Commodity contracts |  |  |  |  |  |  |
Fair-value hedged inventories | — |  |  | (4,361) |  |  | — |  |  | (9,357) |
Exchange-traded futures designated as hedging instruments | — |  |  | 5,262 |  |  | — |  |  | 10,678 |
Total amounts of income and expense line items presented in the consolidated statement of operations in which the effects of cash flow or fair value hedges are recorded | $ | 3,736 |  |  | $ | (9,822) |  |  | $ | — |  |  | $ | (915) |
The notional volume of open commodity derivative positions as of March 31, 2024 are as follows (in thousands):
|  | Exchange-Traded (1) |  | Non-Exchange-Traded (2) |  |  |  |
Derivative Instruments |  | Net Long & (Short) |  | Long |  | (Short) |  | Unit of Measure |  | Commodity
Futures |  | (525) |  |  |  |  |  |  | Bushels |  | Corn
Futures |  | (3,455) |  | (4) |  |  |  |  | Bushels |  | Corn
Futures |  | 27,468 |  |  |  |  |  |  | Gallons |  | Ethanol
Futures |  | (6,898) |  |  |  |  |  |  | MmBTU |  | Natural Gas
Futures |  | 6,828 |  | (3) |  |  |  |  | MmBTU |  | Natural Gas
Futures |  | (3,275) |  | (4) |  |  |  |  | MmBTU |  | Natural Gas
Options |  | (552) |  |  |  |  |  |  | Pounds |  | Soybean Oil
Options |  | (3,173) |  |  |  |  |  |  | Bushels |  | Corn
Forwards |  |  |  | 29,016 |  |  | — |  |  | Bushels |  | Corn
Forwards |  |  |  | — |  |  | (219,591) |  |  | Gallons |  | Ethanol
Forwards |  |  |  | 52 |  |  | (327) |  |  | Tons |  | Distillers Grains
Forwards |  |  |  | — |  |  | (27,279) |  |  | Pounds |  | Renewable Corn Oil
Forwards |  |  |  | 12,162 |  |  | (10) |  |  | MmBTU |  | Natural Gas
(1)Notional volume of exchange-traded futures and options are presented on a net long and (short) position basis. Options are presented on a delta-adjusted basis. (2)Notional volume of non-exchange-traded forward physical contracts are presented on a gross long and (short) position basis, including both fixed-price and basis contracts, for which only the basis portion of the contract price is fixed. (3)Notional volume of exchange-traded futures used for cash flow hedges. (4)Notional volume of exchange-traded futures used for fair value hedges. Energy trading contracts that do not involve physical delivery are presented net in revenues on the consolidated statements of operations. Included in revenues are net gains of $1.8 million and $3.8 million for the three months ended March 31, 2024 and 2023, respectively, on energy trading contracts.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent + Details
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